Facebook enhances an ad-targeting tool

Facebook Inc. has updated its tool for creating custom user groups that marketers then can target with ads on the social network.

The tool, Custom Audiences, now has a feature that incorporates external customer data from digital marketing vendors Datalogix, Epsilon, Acxiom Corp. and BlueKai. Marketers can use the new feature to create segments such as “soda drinkers” or “customers who browsed for a specific make or model of car on my web site,” and then present Facebook ads to those consumers, a Facebook spokeswoman says.

The social network is rolling out the new functionality to advertisers in limited batches, starting with U.S. marketers, it says. Facebook says it will release preliminary results of the program in March.

“Since many brands work with third parties to reach more of their customers, we want to give marketers the option to do this via custom audiences,” the spokeswoman says. “We think this will lead to more relevant advertising for people on Facebook.”

The external data will help fill gaps in Facebook’s information about consumers, such as revealing which store locations a user who likes Starbucks prefers to visit on her way to work. That will allow retailers to create more specific audience segments—such as swimmers in the Northeast who like Starbucks and have bought a car in the last year—than they could before, says Rebecca Lieb, an analyst at the business research and advisory firm Altimeter Group. “Facebook has enormous amounts of data, but you can now triangulate that data with say, Epsilon, and get a more three-dimensional view of a user on an anonymous basis,” she says.

Facebook users will still be able to opt out of receiving the ads, either on from a particular advertiser or from all advertisers, it says. The customer segments always will appear anonymous to advertisers, and do not include data that identify an individual consumer.

Custom Audiences launched in September. Facebook declines to discuss how the changes will impact ad pricing, but Lieb says that the more precisely targeted an ad, the more it costs. “I’m sure that this will be a premium product,” she says.

Earlier this month, the social network tested “Lookalike Audiences,” enabling advertisers to target consumers who look like their existing customers.